2 New Ways Amazon Could Increase Its Stock Value By 2013

Amazon.com, Inc. (NASDAQ:AMZN) started from humble beginnings to emerge as a major player in Internet commerce. Over the years, the company has developed sound business strategies, created a diverse portfolio that includes online retail, streaming media, web server and cloud computing. Amazon has built a brand that most people all over the world instantly recognize. The company has also continually found ways to stay innovative in an increasingly competitive marketplace.

With growth comes a certain amount of uncertainty, since growth doesn't always equal a return on investment. But investors shouldn't worry too much as Amazon seems to be moving in the right direction with its latest projects and investment ventures.

Digital Media Development Center

Amazon recently announced it will open a digital media development center in London, England. Combining two media outlets purchased last year, Lovefilm and Pushbutton, the company plans to develop and create new media content for PCs, tablets, smartphones, and gaming consoles. Lovefilm, similar to Netflix (NASDAQ:NFLX), allows subscribers to download movies and other content. Pushbutton specializes in designing user interfaces for ease of use on a variety of devices.

Staying on target with the latest technology and demands of consumers, Amazon will continue to show a profit. According to comScore, in 2011, 100 million people in the U.S. watched some form of online media content each day. Tapping into this growing market will help keep Amazon competitive, while resulting in a healthy stock price.

By producing media content in-house and distributing it through its Amazon Prime and Amazon Instant Video services, the company will save money as well because it will not have to outsource production, post-production or hosting. The monies saved could then be used to fund future projects.

Career Choice Program

Helping employees pay for continuing education could help Amazon reduce turnover and provide a way for some employees to advance into higher paying positions within the company. Amazon's Career Choice Program has met with some skepticism, however. According to the company, it will pay up to 95% of the costs for employees to complete certification programs in growing or emerging industries as specified by the U.S. Bureau of Labor Statistics. Employees do not have to stay with the company for any length of time after earning their certificate. Some analysts applaud Amazon for its efforts in helping employees further their education and in helping the economy, while others think Amazon is simply looking for good publicity.

Regardless of the company's true intentions, assisting employees with their educational goals could increase sales/revenue over time by helping ensure a steady workforce and promoting company loyalty, especially if employees decide to stay with the company upon completing their education.

Investing in continuing education for employees could help Amazon increase retention rates that could help increase productivity over time. This translates into high profit margins and additional customer loyalty. According to the 2012 Towers Watson Global Workforce Study, those looking for employment ranked career advancement and learning and development opportunities as major reasons to pursue employment with a particular company. The study also found career advancement a major reason why employees stayed with a company over time.

Following the Numbers

Most companies use some form of metrics to measure productivity, customer satisfaction, shipping, returns, and many other facets of a business. Amazon has relied on such metrics to measure most of its operations. But even though the company reviews its daily operations using the data collected, Amazon still makes room for new ideas and ways to improve these numbers.

This should sound really good to investors that want to invest in companies with sound business plans and strategies going forward. I think Amazon does a great job balancing what exists today and what is possible tomorrow. By building a business strategy to tackle current obstacles or those in the immediate future, the company has the ability to remain forward thinking. This business model allows the company to continually cover its bottom line, while promoting growth.

By using practiced methods for gauging how well the company runs, Amazon can easily fix glitches on its website, production lines, vendor issues, and customer complaints quickly, without disrupting day-to-day operations.

What's Next for Amazon?

As Amazon continues to grow and change, investors may want to know more about what the company plans to work on next. Last month, for example, Amazon announced it plans to develop a smartphone using an in-house operating system. This means the company will compete directly with Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT) and Google (NASDAQ:GOOG), which also rely on in-house operating systems. Apple may launch a new version of the iPhone by September, while Microsoft will introduce Windows 8 OS for computers and smartphones in October. Google, meanwhile, continues to lead the mobile phone market with its Android OS with frequent updates.

Amazon recently made changes to its mobile apps to make them easier for customers to browse the company's website and released an instant video app for customers that want to stream movies and other content from an iPad. This could cause online streaming media competitor Netflix to lose additional customers.

The company also updated the Amazon Cloud Player through licensing agreements with Sony Music Entertainment and others, updating search features, and allowing users to stream music from a variety of devices.

According to the company's second quarter income statement, Amazon spent $3.21 billion in S&G expenses for the second quarter of 2012. Out of this, the company spent $1.08 billion in research and development. With all the new products and services released or soon-to-be launched, this is money well-spent. Investors should continue to hold on to this stock as it could end up a winner for the year, especially with the upcoming holiday shopping season approaching.

Overall, I think Amazon will continue to perform well into 2013 and beyond as long as it has the resources and the drive to continue to grow and build its brand.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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